Published on: February 6, 2024

In a recent update, YES Bank Limited announced that it received official approval from the Reserve Bank of India (RBI) on February 5, 2024. The approval grants HDFC Bank Limited and its affiliated entities the authority to acquire a collective holding of up to 9.50% of YES Bank’s paid-up share capital or voting rights.
The sanctioned approvals extend to HDFC Bank and its group entities, such as HDFC Mutual Fund, HDFC Life Insurance Company Limited, and HDFC ERGO General Insurance Company Limited.
It’s worth noting that the approval comes with a one-year validity period. HDFC Bank is required to acquire the specified shareholding within this timeframe. Failure to do so will result in the automatic cancellation of the approval.

One central point to be noted is that HDFC Bank is already holding a 3% stake in Yes Bank as per the December 2023 Shareholding filings, so the new stake to be potentially bought by HDFC Bank group will be 6.5% and not 9.5%
The recent surge in Yes Bank’s stock following the approval from the Reserve Bank of India (RBI) for HDFC Bank Group to increase its stake to 9.5% has undoubtedly captured the attention of investors. However, before jumping into the fray, it’s essential to consider whether this rally signifies a genuine turnaround for the beleaguered bank or merely a temporary blip on a downward trajectory.
One critical indicator investors should heed is the death-cross moving average theory. This technical analysis tool, observed on the weekly chart of Yes Bank, highlights a significant concern.
Yes Bank Weekly Chart

The Death Cross occurs when a shorter-term moving average crosses- 50WEMA (Weekly Exponential Moving Average) below a longer-term moving average of 200WEMA, indicating a potential shift towards a bearish trend. In the case of Yes Bank, the stock is still trending below Death Cross levels, signalling a prevailing long-term bearish sentiment.
Although the recent rally has propelled the stock above the 50-week Exponential Moving Average (WEMA), it’s worth noting that Yes Bank is still trading below its 200-week WEMA, indicating persistent challenges on the horizon. Despite the optimism surrounding HDFC Bank Group’s increased stake, the stock’s position relative to these moving averages underscores its future performance’s lingering uncertainties.
Investors must also consider the broader context of Yes Bank’s tumultuous journey. From regulatory concerns to governance issues, the bank has grappled with many challenges that have eroded investor confidence and tarnished its reputation. While the worst may be over for Yes Bank, as some optimists argue, the reality is far from certain.
Investors must exercise caution and maintain a prudent approach towards Yes Bank. While the prospect of a golden cross—an optimistic scenario where the shorter-term moving average surpasses the longer-term moving average—may offer hope for a potential turnaround, it’s imperative to wait for concrete evidence of sustained improvement before diving back into the stock.
In conclusion, the recent uptick in Yes Bank’s stock price following HDFC Bank Group’s increased stake warrants attention, but investors should tread carefully. The lingering presence of the Death Cross on the weekly chart and the bank’s continued struggles to reclaim its footing suggest that caution is warranted. Until more precise signals of a sustained recovery emerge, it may be prudent to exercise patience and refrain from rushing into investments in Yes Bank.